Art: a core focal point at Edmond de Rothschild

Conferences
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26/07/2016

Deloitte Luxembourg invited Mélanie Damani, lawyer and art advisor at Edmond de Rothschild, to present her expertise to Chinese members of the Asian Institute of Art & Finance. She explained how art services are an integral part of the private bank’s wide array of wealth management services.

These include acquiring and holding works of art, structuring and transmission, art-secured lending, logistics and conservation, assistance and representation at auctions, philanthropic services connected with art, training and much, much more. Edmond de Rothschild now provides collectors with a comprehensive range of services.

A full palette of services

The range was conceived as a response to the growing international interest in this asset class, but is not simply meant to supplement existing wealth management services. Instead, it is a natural extension of the private bank’s time-honoured approach: constantly seeking long-term solutions tailored to each individual client.These were the points raised by Mélanie Damani, International Wealth Structuring and Art Advisor at Edmond de Rothschild.

Art: an asset class in its own right

This new educational organisation, founded in Shanghai by Mr Yong Fan, offers an elite international course including a placement in Luxembourg lasting several days. Art is rising to prominence as an asset class in China, whereas the real estate market is correcting its excesses and securities are experiencing high volatility and negligible – or even negative – yields.

“To protect and grow your estate, and to pass it on to future generations in the best possible condition, successful and transparent wealth management necessitates a thorough understanding of your history, the overall structure of your current assets and your financial and personal ambitions,” explained Mélanie Damani.

Protection, growth and transfer

She underscored the extent to which this thorough understanding requires meaningful communication to ensure long-term perspective.

“A service dedicated to families, their assets and organising future generations’ inheritance was created within our Wealth Solutions department a few years ago. Its role reflects our need to create the most favourable environment possible for dialogue with our clients, so that we understand their needs, limitations and aspirations for subsequent generations,” she argued.

Above all, it is crucial to fully grasp the specific needs of each member of the family in order to ensure optimal wealth structuring and estate planning, choose an appropriate form of governance and prepare for future generations. But this comprehensive approach does not end there. It also entails factoring in personal interests and passions; for example, in the field of philanthropy, or even art itself.

Family Advisory, Art Advisory

The Art Advisory service is therefore an integral part of this range, and reflects the pursuit of the enhanced personalisation and communication that is so important to families seeking comprehensive advice. “Clients sometimes wrongly believe that their art collection is highly personal and that it should not be included in any assessment of wealth,” noted the Art Advisor.

Just as one might learn about the life of a family, it is also important to consider the various stages in the lifecycle of an art collection to ensure that the same approach is adopted in the long term.

There is the acquisition phase through purchase or inheritance. Next comes holding, and finally, transfer. Each stage requires specific expertise.

The importance of governance

“If an art collection is perceived as an aspect of a family’s wealth that must be protected, expanded and passed down to the next generation, specific governance must be established. Shared artistic values are identified. A decision-making process is identified (through a family art committee, for example). Expectations are defined (family collection policy). Lastly, the next generation should be taught about and encouraged to take an interest in art so that they are well prepared,” explained Mélanie Damani.

The DNA of the Rothschild family

While this art advisory service is a logical extension of wealth management, it also benefits from the Rothschild family’s longstanding artistic tradition.

Members of the family were also patrons of historic figures such as the composers Rossini and Chopin, the writer Balzac and even the painter Delacroix.Lastly, one of the 12 Edmond de Rothschild philanthropic foundations is dedicated to promoting art and culture.

“Art is part of the DNA of the Rothschild family, and this increases our standing in the field in the eyes of both clients and employees,” summarised Mélanie Damani.

The expert explained in passing that this history influenced her personal decision to join the bank in 2015.